Global investors survey find that people are likely to retain the savings habit fuelled by the pandemic
When you’re young and carefree, spending what you earn on experiences might appeal but today’s youngest adults are also embracing saving.
Among the many behavioural shifts that the pandemic has created, increasing savings is one that is set to last beyond the current crisis according to a global investment study by asset manager Schroders.
It found that, across its 32-country reach, almost half of respondents among the 23,000 surveyed said they will save more once restrictions have lifted. This sentiment is strongest among those aged 18-37.
Perhaps the pandemic has focused younger minds on what getting older means, with 67% of those yet to retire saying they want to save more towards their retirement and 58% taking a more conservative approach to spending their retirement savings.
Financial wellbeing is front of mind for most respondents (74% have spent more time thinking about their finances since the pandemic started) and this is strongest among those who identify as expert or advanced investors.
Investors are also more likely now to check the performance of their investments at least once a month – 82% do so compared to 77% before the pandemic.
“The pandemic has heightened our sense of uncertainty and challenged our ability to process risk, making many of us feel more anxious and out of control,” said Stuart Podmore, a behavioural investment insights specialist at Schroders. “These sentiments can clearly be seen in the results of our survey, with investors increasingly focused on saving, monitoring retirement contributions and checking their investments more frequently.”
Growing optimism
Investors are more optimistic now than at any time in the last 5 years; they expect annual returns on investments to average 11.3% over the next 5 years, up from 10.9% a year ago.
In the Americas, sentiment is highest of all regions with return expectations of 12.5%, although there are warnings that investors are chasing returns that have already been realized.
“Although this is a global study, we all share common wants and needs, and financial security is a key focus for all of us. At the same time, we need to exert caution over the investment returns we expect over the coming five years, as the outlook shared by many investors – and in particular those who believe themselves to be experts – is exceptionally optimistic,” added Podmore.
He concluded that a “measured, consistent and patient approach to investing, focused on long term objectives and probable outcomes, is likely to stand investors in better stead.”
